Fact Focus: The real picture of Trump's economy

The US president makes every possible effort to persuade voters about the "explosive" rise of the American economy. However, among them, citizens state that inflation remains one of the biggest daily challenges. The war in Iran has driven up fuel prices, supermarket bills remain high, while high interest rates make the housing or new car market almost prohibitive. The reality is that the American economy is neither as strong as Trump claims, nor as weak as reflected in the negative measures of consumer sentiment. With an explosive cocktail of inflation, widening inequality, and stock market gains, the economic performance does not justify the public's expectations nor meet the pre-election commitments. Inflation at 3.7%: The Increase in Prices Voters expected Donald Trump to rectify the accuracy. In his inauguration speech, the Republican president had pledged: "I will order all members of the Cabinet to mobilize every available resource to defeat the record inflation and quickly reduce the cost of living." Moreover, in his recent pre-election speech in Ohio, he claimed that "there is almost no inflation." However, the official data from the US Department of Labor does not support this claim. The Consumer Price Index (CPI) grew at an annual rate of 3% in January 2025 when Trump returned to the White House. The slowdown continued until April 2025, when the broad tariff package was announced, triggering a new round of appreciations. The situation worsened further this year, with the sudden outbreak of war in Iran. Although inflation has not reached the historical highs of Joe Biden's term, the data clearly show a downward trend that was abruptly reversed under Trump, reaching 3.7%, shortly before the election. Growth at 2%: Stable Rates, But Without Trump's "Miracle" According to a study by the University of Michigan, consumer confidence in the economy is at lower levels, even compared to the pandemic period of 2020 or the 2008 financial crisis. Despite the poor market psychology, the US is not in recession. Gross Domestic Product (GDP) is growing at an annual rate slightly above 2%. This is a satisfactory performance, although it lags behind the growth rates recorded during the Biden administration. Nevertheless, Trump insists that growth is the strongest in history, citing record foreign investments, claims that analysts characterize as exaggerations and vain desires. "We are ensuring growth, as we have never seen before," the American president stated in a rally in Arizona. The Labor Market: Low Unemployment, Slowdown in Hiring The unemployment rate of 4.2% remains a positive indicator. Trump inherited a strong labor market, which is maintained in an environment that economists describe as "low hiring, low layoffs." The US president often argues that there have never been so many jobs in the US in the past. However, this is due mainly to the demographic increase in the population and not his policies. During his second term, an average of almost 39,000 jobs are created monthly, a number more than double the 121,000 monthly jobs that were added during the time before his return to the White House. A major factor in reducing the rate of new job creation is the tough immigration policy, which has limited the available labor force. In addition, the unemployment rate for US-born citizens remains stable, indicating that Americans do not fill the positions previously held by migratory flows. Interest Rates and Lending: The Cost of Money is High With the national debt growing, inflation persisting, and energy prices being pressured due to the crisis in Iran, taking out loans for a home, car, or basic needs is becoming increasingly expensive. The yield on the 10-year US Treasury bond exceeded 5%, reaching the highest levels since 2002. This development dramatically increases the cost of borrowing for private individuals while simultaneously burdening the repayment of the government debt by the US government. Stock Market: Record on Wall Street, But with Asterisks One of Trump's favorite arguments is the trend of stock market indicators. The S&P 500 index recorded a rise of about 12% this year, after a 16.4% increase last year. However, in 2024 – before taking office from Trump – the rise had reached 23.3%. Analysts point out that Wall Street is affected by broader factors, beyond presidential politics, with the booming growth of technology companies keeping the market high. In addition, Trump's tax cuts strengthened corporate profits, with the Congressional Budget Office (CBO) noting that federal revenues from corporate taxation decreased by 16% last year. Social Inequality: Widening the Gap Data from the Federal Reserve (Fed) reveal a worrying widening of wealth. Since Trump's return to the White House, the wealth of the richest 0.1% of households has increased by $5.5 trillion in just 18 months. In contrast, the poorest 50% of households saw their wealth increase by $380 trillion. This translates to an average increase in net position of only $5,600 for the poorest half of the population, while for the richest 0.1%, the average increase was $40.8 billion, an amount more than 7,000 times greater. With information from Associated Press, The New York Times